House Bill 205 seeks to incentivize donations to private schools for tax credits

Kentucky House Bill 205 was introduced in the Kentucky House of Representatives on Feb. 5, and its primary purpose is allowing donors who make contributions to private schools to claim large tax breaks for giving to scholarship groups. The bill serves as a tuition assistance program for students wishing to attend private schools, which are largely funded through donations and tuition costs rather than state and federal funding.

House Bill 205 is sponsored by House Majority Floor Leader John “Bam” Carney (R) of Campbellsville. Other sponsors for this bill include Rep. Chad McCoy (R), Rep. Adam Koenig (R) and Rep. Sal Santoro (R).

The bill states that those who donate to nonprofit scholarship-granting organizations should receive a 95 percent tax break based on their donated contributions, with a $1 million cap. Individual citizens and businesses who support Scholarship Granting Organizations (SGOs) would receive a nonrefundable state tax credit in return for their donations.

House Bill 205 will limit scholarship awards to $25 million for the 2020 fiscal year.

The bill primarily targets low-income families who would prefer to send their children to a private school rather than a public school.

Tim Hoak is the school administrator at Heritage Christian School, a private, faith-centered school in Owensboro that teaches preschool through eighth grade. Hoak said the decision to allow HCS to participate in the scholarship funding program through House Bill 205 would be largely based on the potential stipulations that may be attached to the bill.

“If certification requires us bowing to certain state requirements, we might be hesitant about that,” Hoak said. “We are private for a reason — so that we can teach students on a God-centered education.”

While Hoak feels rigid regulations from the state could have the potential to upend HCS’ primary focus, Hoak said a tax credit or voucher system would be beneficial to the parents of students at HCS.

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“All of our parents pay taxes. Some kind of voucher or tax credit would be really beneficial for our parents, as long as that would not involve any kind of restrictions,” Hoak said.

As far as tuition costs are concerned, Hoak said some parents struggle with the required payments, but compared to other schools across the state, tuition at HCS is considerably low. Last year, HCS received a record-setting $25,000 in scholarship donations.

“We’re at the bottom of the rung [for tuition costs], but some parents still have trouble paying tuition,” Hoak said.

Eligibility requirements are listed in the bill, showing the line drawn between families who do and don’t qualify for the scholarships based on household income.

An eligible school-age student must come from a household income that is 200 percent or less than the household income that the state determines eligibility for the free and reduced lunch program.

Students who’ve previously received a scholarship from a qualified scholarship-granting organization are eligible to obtain scholarships via House Bill 205. Students are also eligible if a member of their household qualifies for an SGO.

The final eligibility consideration includes students currently residing in the Commonwealth’s foster care program.

In a WDRB article out of Louisville, Carney said this scholarship investment could send almost 1 percent of current public school students to private school without financially hindering public schools in the process. Carney also said that House Bill 205 would help the state of Kentucky economically, in that kids would be more successful in school and, in turn, find employment across the state.

According to 2018 statistics presented by the Kentucky Department of Education (KDE), public schools across the state had an 89.7 percent student graduation rate along with a 1.3 percent drop-out rate and a 94.4 percent attendance rate. These statistics were taken from the 1,120 working public schools across Kentucky that educated 656,588 students in 2018.

Opposition to House Bill 205 has been made across the state, including from the Kentucky Education Association (KEA), which has shared many oppositional posts via Facebook, asking citizens to contact state legislation and oppose the bill for numerous reasons.

“HB 205 is a school voucher bill posing as tuition tax credits,” the KEA posted on Tuesday, Feb. 5. “It would award huge tax credits to rich Kentuckians to incentivize their children attending public schools. We as a state need to generate more revenue for our public schools and educators instead of providing more incentives for rich people pushed by out-of-state interests.”

Katie Pickens is an English graduate from WKU and an aspiring fiction novelist. A night owl by nature, Katie has tried her hand at many odd jobs, including Disney princess, calligraphy writer, and mom of one who thrives on Diet Coke and Googling random facts for hours on end.